Estimated annual costs of recovery: 2019/20 to 2021/22

 

Table 14

 

Illustrative annual cost for three year recovery (£ millions) in each of 2019/20, 2020/21, and 2021/22*

Recovering RTT: keeping up with demand

350

Recovering RTT: one-off cost of clearing waiting list*

600

Increased capacity to recover A&E performance

894

Maintaining social care funding to support the NHS

1010^

Restoring the mental health nursing workforce to 2010 level

157

Restoring the community nursing workforce to 2010 level

189

Covering existing provider deficits

645-960

Sustainable levels of non-recurrent CIPs

526-842

Backlog maintenance: Clearing existing high risk and significant risk*

913

Backlog maintenance: Keeping up with need

300

Funding a 2% pay rise for doctors

135.3

Restoring HEE developing staff budget to 2013 level

155

Reversing planned cuts to public health grant

400

*assumes non-recurrent costs are spread evenly across 2019/20, 2020/21, and 2021/22 to give a realistic recovery timescale.

^ £673m in 2019/20.

 

The increase in funding announced by the government this month is real, and is welcome. The figures in the table above demonstrate the service will be over £8bn better off by 2020/21 than originally planned. The increases then continue for a further three years in a deal unprecedented for any public service since at least 2010.

In addition to the revenue increases, there is scope for further efficiency: NHS trusts have consistently delivered productivity gains that outstrip the wider economy. However, as the NHS develops its ten-year plan, we must be wary of any plans built on unrealistic assumptions of efficiency gains. The failure of the trust sector to hit its financial targets over the last three years can be traced directly back to the overambitious and unrealistic assumptions made on efficiency and demand gains following the publication of the Five year forward view. We know, for example, that many of the productivity gains achieved by the NHS since 2010 have been aided by holding down spend in areas such as pay and capital.


The increase in funding announced by the government this month is real, and is welcome.

David Williams    Policy Advisor - Finances

 

The forthcoming ten-year plan must set out how the new funding, plus efficiency gains, will be spent. There will be four major calls on the money: recovery on performance and finances; keeping up with the expected growth in costs and demand; expanding and enhancing services such as cancer and mental health; and transforming services to establish a more preventative model of care.      

We need to recognise how dependent the NHS is on wider public services, in particular public health and social care. Ensuring that these services are sustainably funded is crucial to the success of the health and care system over the next ten years.

As the new task is defined, honesty and realism will be needed, and it must be recognised that recovering performance will take time and will cost money. The NHS plan will therefore have to make some extremely uncomfortable choices, including over how quickly improvements can realistically be made given the current starting position.

This report shows just how difficult those choices will be given how high the costs of fully recovering provider performances and provider finances.